- Eurozone business activity expands
- China's PMI manufacturing grows
- Investors weigh Fed minutes
FTSE 100: 0.80%
CAC 40: 0.99%
FTSE MIB: 1.84%
IBEX 35: 1.72%
Stoxx 600: 0.87%
A report showing expansion in Eurozone manufacturing and services industries in August pushed European stocks higher at the midday mark on Thursday.
The Markit composite purchasing managers' index (PMI), which includes manufacturing and services, rose to 51.7 points from 50.5 in July, the fastest pace in two years.
Services jumped to 51 this month from 49.8 last month while manufacturing grew to 51 from 49.8.
A reading above 50 signals expansion.
Growth was led by German manufacturing which climbed to 52 from 50.7 in July.
Services in Europe's largest economy jumped to 52.4.
However, France contracted, falling to 47.9 from 49.1. The manufacturing sector's index held steady at 49.7 while services tumbled to 47.7 from 48.6.
"A big question mark still hangs over France's ability to return to sustained growth," said Chris Williamson, Chief Economist at Markit. Although the French PMI is well above the lows seen earlier in the year."
Yet ETX Capital Market Strategist, Ishaq Siddiqi, said the Eurozone data should bring "smiles" to the European Central Bank's (ECB) President Mario Draghi and its members.
"Big sigh of relief for Draghi and Co who now have an even greater excuse to hold back from adjusting monetary policies as growth appears to be on board," he said.
"ECB forecasted an improvement in the euro zone economy by the latter half of 2013 so today's figures are fulfilling policymakers' expectations in Frankfurt and Brussels. On top of that, calm in euro-area peripherals with little fresh noises on the political and fiscal front add to the current market optimism that worse of the crisis is over in the Eurozone."
In China, PMI manufacturing data from HSBC Holdings and Markit rose to 50.1 in August from 47.7 in July.
Investors speculate on Fed stimulus
Investors are weighing up Wednesday's release of the Federal Open Market Committee's (FOMC) minutes from last month's meeting which signalled a move closer to cutting stimulus.
The minutes showed policymakers were "broadly comfortable" with Chairman Ben Bernanke's plan to begin scaling back its $85bn per month in bond purchases later this year as long as the economy continues to pick up.
Several members said tapering may be needed soon as the FOMC indicated that it expects economic growth will continue to improve in the second half.
"While it's far from a certainty, the minutes from the FOMC meeting back in late July appear to support our view that the Fed will begin to slow its monthly asset purchases at the next meeting in mid-September," according to Paul Ashworth, Chief US Economist at Capital Economics.
Ashworth suspects that officials may begin with an initial reduction of $10bn to $75bn.
With policymakers keeping a close watch on economic data, a US Labor Department jobs report released later on Thursday will be in focus. The report is expected to show initial claims for unemployment benefits rose to 330,000 last week from 320,000 the previous week, according to economists.
IMI, Wienerberger AG, Royal Ahold
Shares in IMI gained after the engineering company reported an increase in first-half profit on bigger margins at its severe service business.
Wienerberger AG slumped after UBS AG lowered its recommendation on the shares
to 'neutral' from 'buy'.
Royal Ahold advanced after the Dutch supermarket owner reported second-quarter underlying operating income that exceeded analysts' expectations.
Other asset classes slide
The euro/dollar fell 0.35% to the 1.3308 dollar
Brent crude futures dropped $0.036 to $109.770 per barrel on the ICE.